As Steel Mills in Central China Controlled Loss and Cut Production, Total Production in the Region Declined [SMM Research]

During the survey period (March 12-March 18), the output of wire rod increased while that of rebar declined, and the total inventory of building materials continued to decline; steel plants suffered serious losses. It cannot be ruled out that under the influence of the market, some steel plants may continue to reduce load to produce, and rebar production is expected to decline further next week.

During the survey period (March 12-March 18), the rebar rolling line operating rate and capacity utilization rate in central China declined in the week. Specifically: There are new steel mills undergoing maintenance in all three provinces this week. The main reasons are poor market demand and high factory inventories. Steel mills reduce or suspend production to control losses. Some steel mills reduce production loads, resulting in large-scale output cut at steel mills in central China this week. Individual steel mills in Henan have poor orders for strip steel, and part of the pig iron has been transferred to rebar, but the increase is limited. In terms of factory inventory, on the one hand, steel plants are reducing load production, and on the other hand, the winter storage resources of agents were piled in the factory in the early stage, and now they are about to expire and need to be withdrawn, so the factory inventory decreased slightly.

It is expected that rebar production in central China may continue to decline next week. The impact of steel mills maintenance in this period has not yet been revealed. The number of affected days in the next period will be longer, and the overall output is expected to decline.

During the survey cycle (March 12-March 18), the output of wire rod in central China continued to increase slightly this week. Specifically: some steel mills in Hunan adjusted their rolling line production plans and switched from rebar production to coiled rebar. The output in this period increased slightly. Secondly, some steel mills in Henan resumed production of coiled rebar line. The operating day is shorter. The increase in the next period will be relatively obvious.

The steel mills in Hunan and Henan that resume production will have more production days in the next period than this period. It is expected that the overall output of wire rods in central China will still have room for growth.